Concerns over Client Confidences Spur ABA to Oppose Bill in Senate Judiciary

Later today, the Senate Judiciary Committee will hold a hearing related to S.1454, the True Incorporation Transparency for Law Enforcement (“TITLE”) Act.  TITLE is an anti-money laundering bill.  Per the text, the Act’s purpose is:

  • “to ensure that persons who form corporations in the United States disclose the beneficial owners of those corporations, in order to prevent the formation of corporations with hidden owners, stop the misuse of United States corporations by wrongdoers, and assist law enforcement in detecting, preventing, and punishing terrorism, money laundering, tax evasion, and other criminal and civil misconduct involving United States corporations, and for other purposes.”

Last week, the ABA issued a press release announcing that ABA President Hilarie Bass sent a letter to the Senate Judiciary Committee in which she expressed concerns over provisions in the proposed legislation.

The letter is here.  The ABA Journal has the full story here.

Initially, President Bass expressed concern that TITLE “would improperly subject many lawyers and law firms to the anti-money laundering (AML) and suspicious activity reporting (SAR) requirements of the” Bank Secrecy Act.”  She argued that “[t]his would undermine the attorney-client privilege, the confidential lawyer-client relationship, and traditional state court regulation of the legal profession.”

Citing Rule 1.6 of the ABA Model Rules of Professional Conduct, and equivalent state rules, President Bass submitted that:

  • “Such aggressive reporting requirements may be appropriate for banks or certain other financial institutions, but requiring lawyers to report confidential client information to the government—under penalty of harsh civil and criminal sanctions—is plainly inconsistent with their ethical duties and obligations established by the state supreme courts that license, regulate, and discipline
    lawyers. These requirements would also seriously undermine the attorney-client privilege, the confidential lawyer-client relationship, and the right to effective legal representation by discouraging full and candid communications between clients and their lawyers.”

President Bass went on to cite other concerns, including “costly, and unworkable new regulatory burdens on small businesses, their agents who help them form corporations or LLCs, and the states.”

Might be something to keep an eye on to the extent that your practice includes business formation and advice to business entities.

Image result for senate judiciary committee

 

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If these allegations prove true, that was definitely wrong.

Many lawyers have appeared in the famed Question 5 to the #fiveforfriday legal ethics quiz.  Most of them have been fictional.

Other lawyers have appeared in the equally as famous Was That Wrong? column.  Not one of them has been fictional.

Richard Luthmann is well on his way to becoming the first lawyer to appear in both.

In August, Luthmann’s Game of Thrones inspired demand for “trial by combat” earned him a spot in this #fiveforfriday quiz.  This week, he’s back in the news.

Suffice to say, when you’re a lawyer, it’s never a good sign when the  U.S. Attorney issues a press release announcing that you’ve been charged as a conspirator in a scheme to commit fraud, kidnapping, and extortion. The story has been covered by The ABA Journal, Spectrum News, and SILive.

Here’s a quick outline:

  • Luthmann and others are alleged to have conspired to defraud purchasers of scrap metal.
  • The allegation is that the conspirators intended to sell scrap metal in containers that contained very little scrap metal.
  • It is also alleged that the conspirators planned to “use organized crime connections to settle any disputes that arose with disgruntled customers.”

I’ve never been a federal prosecutor, a scrap metal purveyor, or a mobster.  But I’m pretty sure those “settlements” aren’t the type that most lawyers are used to.

In any event, from #fiveforfriday to federal indictment in the span of 4 months is unprecedented.   Was that wrong? Only time will tell.

Archer

 

Can’t keep quiet? Try harder.

“You will have many opportunities
to keep your mouth shut.
You should take advantage
of everyone of them.”
Thomas Edison

I’ve blogged often on client confidences.  Today’s title is the kinder & gentler version of October’s Hey Lawyers! STFU!!!  

Last week, the ABA’s Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 479: The “Generally Known Exception to Former-Client Confidentiality.”   The ABA Journal’s story on the opinion is here.

Before I share (precious few) thoughts from the new advisory opinion, here’s a quick refresher:

  • Rule 1.6 prohibits a lawyer from disclosing information relating to the representation of a client;
  • Rule 1.9(c) extends the prohibition to “former clients;” and,
  • Rule 1.9(c)(1) states that a lawyer “shall not . . . use information relating to the representation to the disadvantage of a former client except as these rules would permit, or when the information has become generally known.” (emphasis added).

As I mentioned in Hey Lawyers! STFU!!!:

  1. The rules do not permit a lawyer to use information to the disadvantage of a former client merely because the information is “public record.”
  2. Information that is “public record” is not necessarily “generally known.”

So, what is “generally known?”  That’s where the ABA Opinion comes in.

First, however, let’s pause for quick public service announcement:

  • if you’re looking for guidance on when it’s ok to use a former client’s information to the former’s client disadvantage, well, think about that for a moment.

Now, back to our regularly scheduled blog.

The formal opinion analyzes the issues far better than I could.  (plus, I’m late for a lunch meeting) So, I’ll leave you with its conclusion.

  • “A lawyer may use information that is generally known to a former client’s disadvantage without the former client’s informed consent. Information is generally known within the meaning of Model Rule 1.9(c)(1) if it is widely recognized by members of the public in the relevant geographic area or it is widely recognized in the former client’s industry, profession, or trade. For information to be generally known it must previously have been revealed by some source other than the lawyer or the lawyer’s agents. Information that is publicly available is not necessarily generally known. “

As always, let’s be careful out there.

Be Quiet

Paralegal licenses: incremental improvement to access isn’t perfect, but it isn’t bad.

Wrong

In 2013, the Washington Supreme Court adopted a rule authorizing limited license legal technicians to practice.  In 2015, the Legal Education Committee of the Vermont Joint Commission on the Future of Legal Services recommended something similar: authorization for Vermont Certified Paralegals to provide limited legal services.  The recommendation was based, in part, on the staggering number of self-represented litigants in Vermont’s civil docket.

Washington’s LLLT program is here.  The report of the Vermont Joint Commission is here.  The recommendations from the Legal Education Committee begin on page 11.

I chaired the Legal Education Committee.  The idea of a Vermont Certified Paralegal program hasn’t gained much traction.  Which makes me wonder . . .

. . . what if we got it wrong?

To be clear, I don’t think we were wrong to recommend limited licensure for paralegals.  Rather, I wonder if we were wrong to recommend a training & certification program that includes too many barriers to entry.  Did we focus too much on creating mini-lawyers, when far less would be a gargantuan improvement in access to legal services?  In short, did we make “perfect” an enemy of “good?”

These thoughts struck me late yesterday afternoon as I read Mary Juetten’s article in the ABA Journal: The limited license legal technician is the way of the future of law.

Some of Juetten’s key points:

  • “First, access to justice is not limited to low-income Americans. The 80 percent unmet need figure is based on the entire population. Therefore, many families cannot qualify for help and cannot afford an attorney.”
  • “Second, most middle-income citizens carry debt loads commensurate to their earnings, and any unplanned expenses are difficult to cover.”
  • “Third, many family law attorneys charge anywhere from $250 to $400 per hour, which is still more than double that of a LLLT. For example, using a 10-hour matter, a LLLT could charge up to $1,500 but an attorney would be $4,000. That $2,500 is a substantial savings to almost everyone.

Think about that.  $2500.  I’m guessing that even among the demographic reading this blog, $2500 isn’t an amount tossed around casually.

From there, Juetten notes:

  • “As of this month, there are only 26 LLLTs licensed in Washington, mainly concentrated in the Seattle-Tacoma area. The program appears to suffer from barriers to entry including the cost of the classes and the duration of the practical experience requirement. In addition, the classes are not eligible for student aid, so it is also expensive.”

And it’s about when I finished the last paragraph that I said to myself “Self, what if we got it wrong?”

As we consider whether to issue limited licenses to paralegals, we shouldn’t design or require training & certification programs that approximate law school.  The goal shouldn’t be to provide people who can’t afford lawyers with access to something that  walks, talks, and looks like a lawyer.  It should be to provide them with something that is better than they have now – which is nothing.

It’s long past time to think outside the box.  Let’s play “what if.”

What if an 8-week training program is sufficient to provide competent & practical legal services that are better than nothing?  What if it’s 6 weeks?  What if it’s 2?

We didn’t consider those options.  Maybe we should. I mean, we let new lawyers hang their own shingles without requiring liability insurance or any training in trust accounting.

Let’s be honest: right now, there are high-quality Vermont paralegals who, without any additional training, could walk into a courthouse and provide much needed access to the scores of family law litigants without any.  Seriously.  If you were to get divorced tomorrow, who would you choose? A paralegal who has worked for years in a family law practice, or, me?  I’ve been licensed for 23 years and wouldn’t know the first thing to do for you.

I’m not declaring that an 8 (or 6 or 2) week training program is sufficient.  But again, what if it is?  The Vermont Bar Association is more than capable of providing comprehensive and high-quality training.

Some of you might be rolling your eyes and asking “what good would that do in the bigger picture?”   You’re right, it’s not perfect.  There will still be too many people who can’t afford legal services. But, we have to stop looking for the magic bullet that solves the entire problem at once.  The “big picture” gets smaller by providing access to 1 person at a time.

One of my priest’s favorite sermons centers on Loren Eisley’s The Starfish Story.  Here’s the story:

One day a man was walking along the beach when he noticed
a boy picking something up and gently throwing it into the ocean.

Approaching the boy, he asked, “What are you doing?”

The youth replied, “Throwing starfish back into the ocean.
The surf is up and the tide is going out.  If I don’t throw them back, they’ll die.”

“Son, the man said, “don’t you realize there are miles and miles of beach and hundreds of starfish?
You can’t make a difference!”

After listening politely, the boy bent down, picked up another starfish,
and threw it back into the surf.  Then, smiling at the man, he said
“I made a difference for that one.”

So, maybe we got it wrong.  In a perfect world, a Vermont Certified Paralegal might have thousands of hours of practical work and a semester or two of legal curriculum. For now, however, it might require far less to begin to make a difference.

 

Technology Predicts How Jurors Will Vote

I’ll get my soapbox moment out of the way early in this post: Rule 1.1’s duty of competence includes tech competence.

There.

Now, here’s another area in which technology might impact the scope of the duty.  The ABA Journal has this story about Voltaire, a tech company that developed software that “can search through billions of data points, including public records and social media posts, and—within a matter of minutes—pull up all kinds of information on prospective jurors.”  Per the article, the company’s origins are in its CEO’s realization “that law firms didn’t do a very good job using technology to assist them in their cases.”

Hmm. Sounds familiar.

Anyhow, if you’re interested, check it out.  Seems we’ve come a long way from the days of Gene Hackman’s use of technology as a jury consultant.

Voltaire interests me not only from the perspective of a lawyer’s duty of competence, but from a social media standpoint.  Two years ago, I served on jury duty.  Much to my chagrin, I wasn’t picked for a single case.  I presume because the attorneys knew all they needed to know about me.  Still, had they used Voltaire, what more would they have learned about me?

Anyway, I digress.  Back to competence.

Rule 1.1 states that “[c]ompetent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.” I am NOT saying that the duty of competence requires an attorney to use Voltaire (or a service like it) when picking a jury.  At least not yet.

Someday, a client who loses at trial will ask their attorney why the attorney didn’t make use available technology.  And that “ask” might be in the form of a disciplinary complaint or malpractice claim.  Then, the question will become whether reasonably necessary thoroughness and preparation for a jury trial includes using a technology like Voltaire’s.

Voltaire

 

Social Media Sanction! Except, Not Really

Regulators, practicing attorneys, and those who opine on legal ethics seem to wait with bated breath for any sort of disciplinary sanction involving a lawyer’s use or misuse of social media.

In my view, the collective anticipation causes an anxiety that leads lawyers to distrust, if not avoid, social media.  That’s too bad.  Lawyers who distrust & avoid social media tend not to develop the level of tech competence required in today’s practice.

Here’s a test: you’re having coffee, procrastinating about getting the work day started. You have time to read ONE article.  You see these two links:

  1. Lawyer who advised client to ‘relax’ in response to Facebook inquiries gets suspension.
  2. Nebraska lawyer suspended for failing to properly communicate with client.

Which do you choose? Everyone who chose #1, raise your hand.

As I expected, lots of hands.

The links are to the exact same story.  #1 ran in the ABA Journal, #2 in the Omaha World-Herald. To borrow a phrase, social media sells.  Are you telling me that my choice is “lawyer suspended for using Facebook!” or “lawyer fails to communicate with client?” Ha! I’ll take social media 11 times out of 10!

Here’s another test for my lawyer readers: raise your hand if, even without reading the story, you thought “See, I knew Facebook could get me in trouble.”

Again, lots of hands.

Now, read the opinion from the Nebraska Supreme Court.  In reality, the lawyer’s violation had very little to do with Facebook.  The lawyer’s responses to his client likely would’ve violated Nebraska’s rules whether transmited via Messenger, e-mail, phone call, or U.S. Mail.

In other words, a failure to communicate is a failure to communicate regardless of the medium.  The lawyer who fails to engage in a reasonable level of communication via Messenger in 2017 is as guilty of misconduct as the lawyer who, way before Nirvana, failed to engage in a reasonable level of communication in 1985.

This violation had nothing to do with social media.  Don’t fear social media.

Social Media

P.S.: talk about burying the lede.  The lawyer intentionally sued the wrong defendant in order to access deep pockets!!  To me, that’s a bit more disturbing than a garden-variety failure to communicate.

 

 

 

 

 

 

Protect Client Info When Traveling Abroad

Given the proximity of the Canadian border, and with the YLD Thaw in mind, this article strikes home.

As reported by the ABA Journal in this post, ABA President Linda Klein recently authored a letter to DHS in which she expressed “serious concern about standards that permit searches of lawyer laptops and other electronic devices at the border in the absence of reasonable suspicion.”  President Klein’s letter is here.

Let me be clear: I am NOT suggesting that Vermont lawyers have an affirmative duty to refrain from bringing devices that contain client data to Montreal when traveling for the weekend. However, understand what might happen upon your return.  And, as I often say in response to inquiries, avoiding problems is a great way not to have any.  So, if you don’t need your device that contains work & client data while you’re wandering the Old Port, consider not bringing it.

Somewhat related, I’ve previously posted a blog Subpoena to Disclose Client Info?

Border

 

 

 

Withdrawing? Remember this Disco Tune

So, you want to withdraw because your client hasn’t paid.  There’s a rule for that: Rule 1.16.

Specifically, Rule 1.16(b)(5) permits withdrawal when:

  • “the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled.”

Per Comment 8, this includes a client’s failure to abide by the terms of a fee agreement.

This is where disco comes in.

As I was driving to work this morning, Thelma Houston’s version of Don’t Leave Me This Way came on the radio.  I admit: it caused me to dance in the driver’s seat as I carpool-karaoked south on 89.

But the chorus provides a great lesson: when you withdraw, don’t violate a client’s confidences on your way out.  A client’s failure to abide by the terms of a fee agreement does not relieve a lawyer of his or her obligations under Rule 1.6, the rule that prohibits disclosure of information relating to a representation.

Last December, the ABA’s Standing Committee on Ethics & Professional Responsibility issued Formal Opinion 476: Confidentiality Issues when Moving to Withdraw for Nonpayment of Fees in Civil Litigation.  In an excellent article on the advisory opinion, the ABA Journal warned that Lawyers should tread carefully before quitting a troublesome client.

Don’t leave your clients pleading for you not to leave them this way.

Disco Ball

 

Presidents’ Day & Civility

 

civility

On Presidents’ Day, I thought I’d share a message from Linda Klein.  Attorney Klein is the current President of the American Bar Association.  Her words are far better than any summary I could deliver.  So, please read Attorney Klein’s President’s Message from the February edition of the ABA Journal.

President Klein’s message reminds me of  Comment 4 to Rule 3.5 of the Rules of Professional Conduct:

  • “The advocate’s function is to present evidence and argument so that the cause may be decided according to law. Refraining from abusive or obstreperous conduct is a corollary of the advocate’s right to speak on behalf of litigants.  A lawyer may stand firm against abuse by a judge but should avoid reciprocation; the judge’s default is no justification for similar dereliction by an advocate. An advocate can present the cause, protect the record for subsequent review and preserve professional integrity by patient firmness no less effectively than by belligerence or theatrics.”

Finally, as a reminder, the Vermont Bar Association adopted Guidelines of Professional Courtesy in 1989.  Here they are:

Guidelines of Professional Courtesy
 
  • In fulfilling his or her primary duty to the client, a lawyer must be ever conscious of the broader duty to the legal system.

 

  •  A lawyer should act with candor, diligence and utmost respect.
  • A lawyer should act with courtesy and cooperation, which are necessary for the efficient administration of our system of laws.
  • A lawyer should act with personal dignity and professional integrity.
  • Lawyers should treat each other, their clients, the opposing parties, the courts, and members of the public with courtesy and civility and conduct themselves in a professional manner at all times.
  • A client has no right to demand that counsel abuse the opposite party or indulge in offensive conduct. A lawyer shall always treat adverse witnesses and parties with fairness and due consideration.
  • In adversary proceedings, clients are litigants and though ill feelings may exist between clients, such ill feelings should not influence a lawyer’s conduct, attitude, or demeanortowards opposing lawyers.
  • A lawyer should not harass opposing counsel or counsel’s clients.
  • Lawyers should be punctual in communications with others and in honoring scheduled appearances. Neglect and tardiness are demeaning to fellow lawyers and to the legal system.
  • If a fellow attorney makes a just request for cooperation, or seeks scheduling accommodation, a lawyer shall not arbitrarily or unreasonably withhold consent.
  • Effective advocacy does not require antagonistic or obnoxious behavior. Lawyers should adhere to the higher standard of conduct which judges, fellow attorneys, clients, and the public may rightfully expect.

Monday Morning Answers

Friday’s quiz is HERE.  The answers follow the Honor Roll.

Honor Roll

  • Beth DeBernardi, Esq.
  • Andrew Delaney, Esq.
  • Robert Grundstein, Esq.
  • Jackie Chiles’ Lewd-Lascivious-Salacious-Outrageous Fun Bunch
  • Keith Kasper, Esq.
  • Patrick Kennedy, First Brother
  • Hal Miller, Esq.
  • Herb Ogden, Esq.
  • Team Pegasus
  • Jim Runcie, Esq.

Question 1

Today I’m dong a CLE for the Workers’ Compensation bar. Let’s take a question from their world.

Wood represents Plaintiff.  Wood has actual notice from Plaintiff’s health insurer that the insurer has a lien on any recovery.

Richards represents liability carrier.  In connection with settlement, Richards ask Wood to execute an agreement that Wood will personally indemnify and hold harmless the liability carrier for any of Client’s unpaid liens.

Wood agreed.

Which is most accurate?

  • A.   Wood violated the Rules of Professional Conduct
  • B.   Richards violated the Rules of Professional Conduct
  • C.   They both violated the Rules of Professional Conduct
  • D.  Neither violated the Rules of Professional Conduct

See, VBA Advisory Ethics Opinion 2013-01; Wood by creating a conflict of interest & providing financial assistance to a client; Richards by inducing Wood to violate the Rules.

Question 2

Lawyer called me with an inquiry involving Client and  Other. I listened.  Then, I said

  • “It’s ok as long as Client gives informed consent, there’s no interference with your professional judgment or your relationship with Client, and you don’t share any information about the representation with Other absent Client’s consent.”

What is Other’s involvement with this situation?

Other is paying for Lawyer to represent Client.  See, Rule 1.8(f)

Question 3

Large Firm represents Brady in the matter Brady v. Ryan.  Small Firm represents Ryan.

Associate leaves Small Firm to take a job at Large Firm.    Which is most accurate?

  • A.   Large Firm must withdraw from representing Brady.
  • B.   Large Firm may continue to represent Brady.
  • C.  Large Firm may continue to represent Brady if Associate is screened from participation.
  • D.  Large Firm may continue to represent Brady only if Associate did not participate personally & substantially in Small Firm’s representation of Ryan , and, Large Firm screens Associate from participation in the matter.

This is Vermont’s Rule 1.10(a)(2).  The Vermont rule is more broad than the ABA Model Rule.  When a lawyer changes jobs, the ABA rule allows the new firm to screen the attorney even if the attorney participated personally & susbstantially in the matter while at the old firm.  Also, Vermont Rule 1.10(a)(2)(ii) and (iii) impose significant requirements beyond mere screening.

In that Vermont’s rule is more broad than the ABA’s, there is some concern that it limits job opportunities in a small state.  The counter-argument is that client loyalty and confidences are paramount.

Question 4

Nationally, which is most common with respect to  Electronically Stored Information?

  • A.   Discovery sanctions for failure to preserve ESI; See, This Study
  • B.   Discovery sanctions for producing ESI  in an improper format
  • C.   Disciplinary sanctions for failure to preserve ESI
  • D.   Disciplinary sanctions for failing to request ESI in discovery

For more, the California State Bar’s advisory ethics opinion on handling Electronically Stored Information is HERE.  Last week, the Wisconsin Bar published this post on ethics, professionalism, and E-Discovery.

Question 5

Identify the event that resulted in the American Bar Association deciding that legal ethics/professional responsibility should be a required course in law school.

Watergate.  See, ABA Journal, “Watergate’s Lasting Legacy is to Legal Ethics Reform, Says John Dean.” (that’s the Watergate complex, front left, on the banks of the Potomac, next to the Kennedy Center)

Watergate.jpg